On December 31,2012,before closing the accounts,Rampart Corporation had a balance in Retained Earnings of $30,000.Rampart's net income for the year was $12,000.On that date,the board of directors approved an appropriation of retained earnings in the amount of $10,000 because the company planned to expand its facilities.The corporation had 1,000 shares of $10 par common stock outstanding and a balance in Paid in Capital in Excess of Par Value of $18,000.
Required:
a)Indicate the effect of the appropriation of retained earnings on the financial statements. b)What effect did the appropriation of retained earnings have on total stockholders' equity?
c)Prepare the Stockholder's Equity section of the Rampart Corporation's Balance sheet as of December 31,2012.

Question

On December 31,2012,before closing the accounts,Rampart Corporation had a balance in Retained Earnings of $30,000.Rampart's net income for the year was $12,000.On that date,the board of directors approved an appropriation of retained earnings in the amount of $10,000 because the company planned to expand its facilities.The corporation had 1,000 shares of $10 par common stock outstanding and a balance in Paid in Capital in Excess of Par Value of $18,000.
Required:
a)Indicate the effect of the appropriation of retained earnings on the financial statements.  b)What effect did the appropriation of retained earnings have on total stockholders' equity?
c)Prepare the Stockholder's Equity section of the Rampart Corporation's Balance sheet as of December 31,2012.

Quizplus · Accepted Answer

The Answer of On December 31,2012,before closing the accounts,Rampart Corporation had a balance in Retained Earnings of $30,000.Rampart's net income for the year was $12,000.On that date,the board of directors approved an appropriation of retained earnings in the amount of $10,000 because the company planned to expand its facilities.The corporation had 1,000 shares of $10 par common stock outstanding and a balance in Paid in Capital in Excess of Par Value of $18,000.
Required:
a)Indicate the effect of the appropriation of retained earnings on the financial statements.  b)What effect did the appropriation of retained earnings have on total stockholders' equity?
c)Prepare the Stockholder's Equity section of the Rampart Corporation's Balance sheet as of December 31,2012.

On December 31,2012,before Closing the Accounts,Rampart Corporation Had a Balance